AgraKey Solutions, LLC et al v. Mid-Continent Casualty Company

Filing 63

MEMORANDUM DECISION AND ORDER denying 19 Motion for Summary Judgment; The Court instead grants summary judgment in favor of defendant, Mid-Continent Casualty Company.. Signed by Judge Edward J. Lodge. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (dks)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO

AGRAKEY SOLUTIONS, LLC AND
JOHN REITSMA,
Plaintiffs,

Case No. 1:10-cv-00570-S-EJL
MEMORANDUM DECISION AND
ORDER

v.
MID-CONTINENT CASUALTY
COMPANY,
Defendant.

INTRODUCTION
The Court has before it plaintiff AgraKey Solutions, LLC and John Reitsma’s
motion for summary judgment (Dkt. 19). The Court has determined oral argument would
not significantly assist the decisional process and will decide the motion without a
hearing. For the reasons expressed below, the Court will deny the motion.
FACTS
This is an insurance policy coverage dispute. AgraKey bought general commercial
liability insurance from Mid-Continent Casualty Company. The policy included coverage
for “advertising or personal injury.”

MEMORANDUM DECISION AND ORDER - 1

During the effective date of the policy, third party BioMagic, Inc. commenced
arbitration proceedings against AgraKey, individual defendant John Reitsma, and Dutch
Brothers Enterprises, LLC. AgraKey1 contends that BioMagic sought redress for
“personal or advertising injury” in that arbitration and, therefore, believes Mid-Continent
was obligated to provide a defense.
The BioMagic arbitration concerns a license dispute between BioMagic, on the
one hand, and Dutch Brothers, AgraKey, and Reitsma, on the other hand. See Demand
for Arbitration, Dkt. 26-1. In its arbitration demand, BioMagic alleges that these parties
breached a December 2005 license agreement.
Under that agreement, BioMagic granted Dutch Brothers an exclusive license to
manufacture, market, and sell BioMagic’s “proprietary bio-stimulant products,
accessories, and supplies in ‘agriculture and agriculturally related applications in North
America, including Hawaii.” Dkt. 26-1 at 5. In 2007, BioMagic consented to Dutch
Brothers’ transfer of its rights under the license agreement to Reitsma, individually. See
May 7, 2007 License Transfer Agmt., Dkt. 26-1. Reitsma then formed a new company –
AgraKey – to perform the marketing and sales functions under the license agreement,
while Dutch Brothers continued to manufacture the product.
In hindsight, BioMagic believed AgraKey saw this transfer agreement as a means
to avoid paying royalty payments due under the original license agreement. See Dkt. 261, at 5-6.

For ease of reference, the Court sometimes refers to all respondents in the BioMagic
arbitration as “AgraKey.”
1

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BioMagic alleges that beginning in early 2009, AgraKey and Dutch Brothers
materially breached the license agreement by marketing and selling BioMagic’s
“proprietary products” to businesses not involved in agriculture. Dkt. 26-1, at 6.
BioMagic also claimed that AgraKey and Dutch Brothers failed to pay royalties for the
first three quarters of 2009. BioMagic indicated that it would elect to terminate the
license agreement unless these breaches were cured. AgraKey and Dutch Brothers
responded that they wanted to terminate the license agreement anyway. As a result, the
license agreement terminated effective November 2, 2009.
On November 13, 2009, BioMagic filed its arbitration demand, summarizing its
complaint as follows: “By continuing to manufacture, market, and sell Claimant’s
proprietary products after termination of the License Agreement and to companies outside
the scope of their licensing rights, Respondents are intentionally misappropriating
Claimant’s property, engaging in unfair competition, and intentionally interfering with
Claimant’s prospective business relationships.” Dkt. 26-1, at 7.
Roughly six months after commencing the arbitration, BioMagic moved for
injunctive relief. See Dkt. 26-2. In that motion, BioMagic contended that defendants’
continued manufacture and sale of the products was “creating confusion in the
marketplace as to who actually owns the proprietary rights of BioMagic’s products.”
Dkt. 26-1 at 10:22-24; see also Watt Dec., Dkt. 26-3; Mobley Dec., Dkt. 26-4.
Shortly after BioMagic filed its motion for injunctive relief, AgraKey tendered
defense of the BioMagic arbitration to Mid-Continent. See June 22, 2010 Letter, Dkt. 26-

MEMORANDUM DECISION AND ORDER - 3

9. After some back and forth between the insurance company and its insured, MidContinent denied coverage. See Oct. 4, 2010 Letter, Dkt. 26-17.
Meanwhile, the arbitration proceedings continued and in February 2011, the
arbitrator entered its final award in favor of BioMagic. After the arbitrator entered this
award, AgraKey pressed the coverage issue, attempting to convince Mid-Continent to
reconsider its decision to deny coverage. Mid-Continent again denied coverage and,
shortly thereafter, AgraKey and Reitsma filed this suit.
THE LEGAL STANDARD
Motions for summary judgment are governed by Rule 56 of the Federal Rules of
Civil Procedure. Rule 56 provides that “[t]he court shall grant summary judgment if the
movant shows that there is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). “A party asserting that a
fact cannot be or is genuinely disputed must support the assertion by: (A) citing to
particular parts of materials in the record, including depositions, documents,
electronically stored information, affidavits or declarations, stipulations (including those
made for purposes of the motion only), admissions, interrogatory answers, or other
materials; or (B) showing that the materials cited do not establish the absence or presence
of a genuine dispute, or that an adverse party cannot produce admissible evidence to
support the fact.” Fed. R. Civ. P. 56(c)(1).
The party moving for summary judgment has the initial burden of showing there
are no genuine issues of material fact and that it is entitled to judgment as a matter of law.
See Anderson v. Liberty Lobby, 477 U.S. 242, 247-48 (1986). Material facts are those

MEMORANDUM DECISION AND ORDER - 4

necessary to the proof or defense of a claim, and are determined by reference to
substantive law. Id. at 248. A fact issue is genuine “if the evidence is such that a
reasonable jury could return a verdict for the nonmoving party.” Id.
Once the moving party has met its initial burden, the nonmoving party has the
burden of presenting evidence to show that a genuine issue of fact remains. The party
opposing the motion for summary judgment may not rest upon the mere allegations or
denials of her pleading, but must set forth specific facts showing that there is a genuine
issue for trial. Id. at 248. If the non-moving party “fails to make a showing sufficient to
establish the existence of an element essential to that party’s case, and on which that party
will bear the burden of proof at trial” then summary judgment is proper as “there can be
no ‘genuine issue of material fact,’ since a complete failure of proof concerning an
essential element of the nonmoving party’s case necessarily renders all other facts
immaterial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322–23 (1986).2
In applying the above standard, the Court must view the evidence in the light most
favorable to the non-moving party. Anderson, 477 U.S. at 255.

2

See also Rule 56(e) which provides:

If a party fails to properly support an assertion of fact or fails to properly address another
party's assertion of fact as required by Rule 56(c), the court may:
(1)
(2)
(3)
(4)

give an opportunity to properly support or address the fact;
consider the fact undisputed for purposes of the motion;
grant summary judgment if the motion and supporting materials—including the
facts considered undisputed-show that the movant is entitled to it; or
issue any other appropriate order.

MEMORANDUM DECISION AND ORDER - 5

ANALYSIS
AgraKey says there are two reasons why Mid-Continent was obligated to defend it
in the BioMagic arbitration: First, BioMagic potentially alleged “disparagement,” which
is covered by the policy,” by pursuing AgraKey for unfair competition and intentional
interference with prospective business relationships. Second, BioMagic potentially
alleged an “advertising injury,” and the policy covers “the use of another’s advertising
idea in your advertisement.” See Motion Memo., at 1-2.
The Court disagrees on both counts. BioMagic did not allege disparagement or
advertising injury.3 Before delving into these issues, however, the Court will address a
threshold issue.
A.

Consideration of the Motion for Injunctive Relief
Mid-Continent argues that in determining whether BioMagic alleged any injury

that might be covered under the policy, the Court must confine its review to the
arbitration demand. More to the point, Mid-Continent contends that the Court cannot
consider the later-filed motion for injunctive relief.
Mid-Continent relies principally on Construction Management Systems, Inc. v.
Assurance Co., 23 P.3d 142 (Idaho 2001) to support this argument. But that case did not
directly address whether courts should exclude later-filed briefing in determining
coverage. It simply reiterated hornbook law – namely, that the complaint will be broadly
construed in determining coverage. Id. at 144-45.

Given these rulings, which are explained below, the Court need not address the parties’
remaining contentions.
3

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Idaho courts have not directly ruled on the more precise issue of whether laterfiled briefing should be excluded. Nonetheless, in Hirst v. St. Paul Fire & Marine
Insurance Co., 683 P.2d 440 (Idaho 1984), the Idaho Supreme Court observed that while
the “allegations in the plaintiff’s complaint frame an insurer’s duty to defend, those
pleadings are not to be read narrowly. Rather a court must look at the full breadth of the
plaintiff’s claim.” Id. at 446. Continuing in that that vein, the Hirst Court observed that a
defendant insurance company “‘cannot construct the formal fortress of the third-party’s
pleadings and retreat behind its walls. The pleadings are malleable, changeable and
amendable . . . [C]ourts do not examine only the pleaded word but the potential liability
created by the suit.’” Id. (quoting Standard Oil Co. of Cal. v. Haw. Ins. & Guar. Co., 634
P.2d 123, 129 (Haw. Ct. App. 1981)).
With this observation in mind, it would be odd to hold that courts are duty-bound
to consider potential theories in a complaint, but then ignore any potentiality that has
actually occurred. Here, AgraKey did not tender the BioMagic arbitration for coverage
until after the motion for injunctive relief was filed. This delayed notice may create
issues in terms of AgraKey’s obligation to timely tender,4 but it does not logically mean
that the insurance company can – at that point – create a fortress by focusing solely on the
arbitration demand itself and ignoring the manner in which the arbitration actually
developed. So in determining whether there is coverage, the Court will consider the
motion for injunctive relief as well as the arbitration demand.

The parties dispute whether AgraKey timely tendered the BioMagic action, but the
Court does not need to reach that issue to resolve this motion.
4

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B.

Disparagement
The first substantive issue is whether BioMagic potentially alleged

“disparagement” in the arbitration. The parties do not dispute that the policy, by its
terms, covers “disparagement.” See Ins. Contract, Dkt. 1-1, at 13-14 (defining covered
personal and advertising injury to include injury “arising out of” various enumerated
offenses, including disparagement). They dispute whether BioMagic was pursuing
AgraKey for disparagement.
Disparagement of the quality of goods is a form of injurious falsehood, and is
commonly called trade libel or product disparagement. See generally Restatement
(Second) of Torts § 626, cmt. a. To state a product disparagement claim, the underlying
plaintiff (BioMagic) must allege that the defendant (AgraKey) made false, injurious, or
derogatory statements about BioMagic’s products in an effort to influence potential
purchasers not to buy BioMagic’s products. See generally id. § 623A; Aetna Cas. & Sur.
Co. v. Centennial Ins. Co., 838 F.2d 346, 351 (9th Cir. 1988) (applying California law).
BioMagic does not allege that AgraKey specifically mentioned BioMagic in any
oral or written publication. Instead, AgraKey relies on a disparagement-by-implication
theory generally based on BioMagic’s allegations that AgraKey wrongly represented it
had the proprietary rights to BioMagic’s product. More specifically, AgraKey points to
the following assertions BioMagic made in the arbitration proceedings:

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First, in its motion for injunctive relief, BioMagic argued that “AgraKey’s
continued unauthorized sale of the Licensed Product is creating confusion in the
marketplace as to who actually owns the proprietary rights of the BioMagic Products” See
Sep Stmt., Dkt. 21 ¶ 8.
Second, in a declaration supporting BioMagic’s motion for injunctive relief, a
BioMagic representative stated that:
the continued unauthorized manufacture, marketing and sale of this product
is causing general damages to BioMagic’s business reputation and
goodwill, by, among other things, creating confusion in the marketplace as
to who owns the rights to this proprietary product and the general reluctance
of customers to do business with BioMagic given AgraKey’s
representations that it owns the rights to this proprietary product.”
Sep. Stmt., Dkt. 21 ¶ 10 (quoting declaration filed in the arbitration proceedings).
Under AgraKey’s theory, these representations implicated BioMagic’s products –
even though AgraKey did not specifically mention BioMagic or its products.
AgraKey has not cited any Idaho authority regarding disparagement by
implication. Nonetheless, this Court predicts that Idaho courts would recognize such a
theory if the publication at issue clearly implicated the plaintiff or its products. See, e.g.,
E.Piphany, Inc. v. St. Paul Fire & Marine Ins. Co., 590 F. Supp. 2d 1244, 1253 (N.D.
Cal. 2008) (“Taken together, these allegations show a claim for disparagement by ‘clear
implication.’”) (applying California law, citations omitted). As one court explained,
“common sense suggests that a product may be disparaged by a publication in which the
identity of the product, while not expressly mentioned, is clearly implied.” Tosoh Set v.
Hartford Fire Ins. Co., 2007 WL 1242172, at *7 (Cal. Ct. App. 2007) (unpublished

MEMORANDUM DECISION AND ORDER - 9

decision) (concluding that the statement at issue was disparaging to defendant’s products
and services “by clear implication”).5
But the problem here is that BioMagic did not allege (or potentially allege) that
AgraKey disparaged BioMagic or its products – either expressly or impliedly. Rather,
BioMagic alleged that AgraKey (1) wrongly sold the product called “UNLOK” in breach
of the parties’ contract, and (2) wrongly represented that it had the “proprietary rights” to
UNLOK. This does not clearly imply anything about BioMagic or its products. Further,
BioMagic did not allege that AgraKey said it had the exclusive rights to sell UNLOK.
That might get AgraKey closer because then there is, arguably, an implication that
anyone else who sells UNLOK is doing so wrongfully. Cf. Liberty Mutual v. OSI
Industries, Inc., 831 N.E. 2d 192 (Ct. App. Ind. 2005) (defendant claimed “absolute
ownership” in the products and technology at issue).
The Court finds Parkham Industrial Distributors, Inc. v. Cincinnati Insurance Co.,
2008 WL 451023 (W.D. Ky. 2008) persuasive. In that case, the court held a company did
not “disparage” another’s product by wrongly saying that it had the proprietary rights to a
particular technology. Id. at *5. As the court explained:
We find that IRST’s argument reaches beyond a reasonable reading
of the ordinary definition of ‘disparagement;’ and thus is without
merit. Additionally, there is no allegation that SPI or SPI products
were identified in IRST’s advertisement, making the connection to
SPI tenuous at best. . . . IRST is not alleged to have said anything
negative about SPI’s products; only that it held the proprietary rights
in the technology.
5

The Court is not persuaded – and predicts that the Idaho courts would not be persuaded – by cases
arguably suggesting a lesser standard. See Plaintiff’s Reply, Dkt. 47, at 4-5.

MEMORANDUM DECISION AND ORDER - 10

Id.
Finally, plaintiff’s reliance on Yousuf v. Cohlmia, 718 F. Supp. 2d 1279 (N.D.
Okla. 2010) is misplaced. See Mot. Memo., Dkt. 20, at 9. There, the court recognized
that “certain claims for intentional interference with contract or business relations will
trigger coverage under insurance policies that cover “the offense” of “the publication . . .
of other defamatory or disparaging material.” Id. But Yousuf itself – as well as the cases
it relied upon – involved a disparaging publication. In Yousuf, the plaintiff in the
underlying action alleged that Yousuf (the insured) made false statements to the news
media that disparaged plaintiff’s reputation. 718 F. Supp. 2d at 1282. See also Bankwest
v. Fidelity & Deposit Co. of Md., 63 F.3d 974, 980 (19th Cir. 1995) (“the Houses’ claim
for intentional interference with contract does allege that Bankwest interfered with their
contractual and business relations by publishing such false statements”); McCormack
Baron Mgmt. Servs., Inc. v. Am. Guar. & Liab. Ins. Co., 989 S.W.2d 168, 171 (Mo. 1999)
(en banc) (“There can be no serious question that the statements alleged in the lawsuit
disparaged Bennett’s services as a security guard.”). In such a context, it makes sense to
find coverage for the interference with business relations – they involved disparaging
publications. Here, as already noted, there is no disparaging publication – either express
or implied. The Court therefore concludes that Mid-Continent was not obligated to
provide a defense based on the “disparagement” clause in the insurance policy.
C.

Advertising Injury
Next, AgraKey argues that Mid-Continent was obligated to defend it in the

BioMagic arbitration because BioMagic alleged an “advertising injury.” The policy

MEMORANDUM DECISION AND ORDER - 11

provides coverage for personal and advertising injury, and defines advertising injury to
include the “use of another’s advertising ideas in your advertisement.’” Ins. Policy,
Dkt.1-1, at 5, 13-14.
There are at least two problems with AgraKey’s advertising-injury argument.
First, even reading the arbitration demand (and the injunctive relief papers)
broadly, BioMagic did not potentially allege that AgraKey used BioMagic’s advertising
idea in its advertisements. AgraKey insists otherwise, pointing to Gary Mobley’s
declaration, which supported BioMagic’s motion for injunctive relief. But Mobley did
not state that AgraKey had used one of BioMagic’s advertising ideas.
Mobley discussed AgraKey’s website in an effort to show that AgraKey was
wrongfully selling the very product that was supposed to be sold (according to BioMagic)
under the terms of the license agreement. To prove that point, Mobley pointed out that
AgraKey’s website includes testimonials from customers who said they had been using
AgraKey’s product for two or three years. As Mobley explained, “Two to three years ago
is 2007-08, when Respondents were manufacturing and selling the Licensed Product
under the name UNLOK product under the terms of the License Agreement and paying
BioMagic royalties. See Mobley Aff. (quoted in Plaintiff’s Motion Memo., Dkt. 20, at 1516). Mobley also stated that AgraKey’s website indicated its product had been the
subject of university research and field trials during the same time AgraKey had sold
UNLOK under the terms of the license agreement. See id. ¶ 14. Again, however, the
point of Mobley’s statements was to demonstrate that the product AgraKey was selling
was the product it had been selling under the license agreement. As Mobley explained,

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“Taken together, these representations in the Research Tab of its website that UNLOK
has been the subject of successful university studies and field trials between 2005-08 is an
admission that the UNLOK product Respondents continue to sell today is the same
Licensed Product that they were manufacturing and selling under the terms of the License
Agreement.” Id. (emphasis added).
Under these circumstances, the Court rejects the argument that BioMagic was
alleging that AgraKey used BioMagic’s “advertising ideas,” such as “customer
testimonials” and “research and university studies.” Mot. Memo., Dkt. 20, at 8.
The Court is also not persuaded by AgraKey’s citation to Bank of the West v.
Superior Court, 833 P.2d 545 (Cal. 1992). Relying on this case, AgraKey suggests that
BioMagic need only allege a “passing off” claim in order to trigger coverage for the “use
of an advertising idea.” See Reply¸Dkt. 20, at 15 (“if AgraKey’s use of UNLOK
constitutes unfair competition in the form of ‘passing off’ as alleged by BioMagic,
BioMagic’s UNLOK is within the meaning of the phrase ‘use of . . . [an] advertising
idea.’”).
Bank of the West is distinguishable. In that case, the California Supreme Court
addressed whether an insurance policy that covered “advertising injury” caused by
“unfair competition” extended to both common-law unfair competition claims as well as
statutory unfair competition claims. See 833 P.2d at 551. The court did not directly
discuss whether policies such as this one – which cover advertising injury caused by the
offense of “using another’s advertising idea in your advertisement” – should be construed
to cover advertising injuries caused by unfair competition.

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The second problem with AgraKey’s advertising injury theory is that BioMagic
did not allege that the “advertising” at issue caused BioMagic’s alleged injuries. In
Construction Management Systems, Inc. v. Assurance Co., 23 P.3d 142, 145-46 (Idaho
2001), the Idaho Supreme Court held that there must be a causal connection between the
advertising activity and the injury alleged in the underlying complaint. See also, e.g.,
Simply Fresh Fruit, Inc. v. Continental ins. Co., 94 F.2d 1219 (9th Cir. 1996) (applying
California law; determining that there must be a causal connection between the injury
alleged in the underlying complaint and the insured’s advertising activity).
In Construction Management Systems, Woodside Homes sued Construction
Management Systems (CMS) for copyright infringement after CMS allegedly built homes
based on Woodside’s copyrighted architectural plans. Id. at 144. CMS argued that if the
Woodside complaint was broadly read, there was a sufficient connection between the
copyright infringement claim and CMS’s advertising activities. More specifically, CMS
contended that building the homes, placing them on the market, and having real estate
brokers promote them gave rise to a potential that the copyright infringement activities
were related to or connected with advertising. The court squarely rejected this argument,
explaining that “[b]ecause Woodside’s claim of infringement, even when read broadly, is
based on the construction of the homes, rather than their advertisement, we hold that
Assurance did not have a duty to defend CMS in the copyright litigation.” Id. at 145.
The same logic applies here. BioMagic’s claim was based on AgraKey’s
continued sale of a product – not on AgraKey’s advertisement of that product. Thus, MidContent did not have a duty to defense for any alleged advertising injury.

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AgraKey argues that a different result is warranted here because its policy
language differs from the Construction Management policy. But there is not any
meaningful distinction. Under both policies, the advertising injury must arise out of – or
be caused by – the advertising. The policies just state that requirement differently.
The Construction Management policy covered, among other things, “‘Advertising
injury” caused by an offense committed in the course of advertising your goods, products
or services . . . .” 23 P.3d at 144 (emphasis added).6 Mid-Continent’s policy applies to
“‘personal and advertising injury’ caused by an offense arising out of your business . . .”
and defines “personal and advertising injury” to mean injuries “arising out of” one or
more enumerated offenses, including the “use of another’s advertising idea in your
“advertisement.” Ins. Policy, Dkt. 1-1, at 11-12.

6

The more complete policy terms in Construction Management are as follows:
COVERAGE B - Personal and Advertising Injury Liability

1. Insuring Agreement.
a. We will pay those sums that the insured becomes legally obligated to pay as damages
because of “personal injury” or “advertising injury” to which this insurance applies.
b. This insurance applies to:
...
(2) “Advertising injury” caused by an offense committed in the course of advertising
your goods, products or services . . . .
23 P.3d. at 143-44. Another section of the policy defined advertising injury as follows:
1. “Advertising injury” means injury arising out of one or more of the following offenses:
....
(d) Infringement of copyright, title, or slogan.
Id. at 144.
MEMORANDUM DECISION AND ORDER - 15

AgraKey insists that there is a substantive difference in these policies by ignoring
the latter portion of the Mid-Continent provision just quoted (the part that defines
advertising injury as one that arises out of the insured’s use of another’s advertising idea
in its advertisement) and, instead, placing these two provisions side by side:
(1)

The Construction Management provision stating: “This insurance applies
to: . . . [¶] ‘Advertising injury’ caused by an offense committed in the
course of advertising your goods, products or services......”

(2)

The Mid-Continent provision stating: “This insurance applies to ‘personal
and advertising injury’ caused by an offense arising out of your
business . . . .”

By focusing solely on the Mid-Continent phrase “arising out of your business” –
and comparing that to the narrower, Construction Management phrase “committed in the
course of advertising” – AgraKey concludes that Mid-Continent’s policy only requires
that the offense arise out of the insured’s business. See Reply, Dkt. 47, at 4.
AgraKey’s causation analysis – and its comparison of the insurance contracts – is
contrived. Of course the advertising injury must be caused by an offense arising out of
AgraKey’s business. But that does not mean that any personal or advertising injury is
covered. Rather, the policy’s definition of “personal or advertising injury” must also be
satisfied. And – as already discussed – the definition of “personal and advertising injury”
provides that the injury must arise out of one or more of the listed offenses.
So, reading the Mid-Continent policy as a whole leads to the following
conclusions: (1) the insurance applies to advertising injury; (2) the advertising injury
must “arise out of” the use of another’s advertising idea in AgraKey’s advertisement; and
(3) that particular offense – using another’s advertising idea in the insured’s

MEMORANDUM DECISION AND ORDER - 16

advertisement – must, in turn, arise out of AgraKey’s business. The causation
requirement thus still applies.
Notably, AgraKey has not cited any authority supporting its causation argument,
and other district courts have rejected similar arguments. See Feldman Law Group P.C.
v. Liberty Mut. Ins. Co., --- F. Supp. 2d ---, 2011 WL 2610642, at *6 (S.D.N.Y. June 30,
2011) (under substantially similar policy language;7 the court observed that the policy
“clearly stated that only allegations of injury directly caused by the advertisement would
be covered”); Everest Indem. Ins. Co. v. Allied Int’l Emergency LLC, 2009 WL 2030421,
at *6-7 (N.D. Tex. 2009).
In sum, BioMagic did not allege that AgraKey used BioMagic’s advertising idea
nor did it allege that AgraKey’s advertising caused BioMagic to sustain any advertising
injury. AgraKey is therefore not entitled to summary judgment.
D.

Summary Judgment in Mid-Continent’s Favor
Mid-Continent, on the other hand, is entitled to summary judgment. Mid-

Continent did not cross-move for summary judgment, but the Court finds that there are no
disputed issues of material facts and, further, Mid-Continent is entitled to summary
judgment. Because Agra-Key had a full opportunity to ventilate the relevant facts and
issue, the Court will grant summary judgment in Mid-Continent’s favor. See Fed. R. Civ.
P. 56(f); Cool Fuel, Inc. v. Connett, 685 F.2d 309, 311 (9th Cir. 1982).

The relevant policy language is set forth at pages 3 and 4 of the policy, which can be
found in the Feldman district court docket at Entry No. 6-3. See Feldman, Case No. 11-civ425(SAS) (S.D.N.Y.).
7

MEMORANDUM DECISION AND ORDER - 17

ORDER
Plaintiffs’ Motion for Summary Judgment (Dkt. 19) is DENIED. The Court
instead grants summary judgment in favor of defendant, Mid-Continent Casualty
Company.

DATED: March 14, 2012

Honorable Edward J. Lodge
U. S. District Judge

MEMORANDUM DECISION AND ORDER - 18